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JP Morgan Expect Tight MonPol to Drive Disinflation, See 600bp of Rate Cuts by Year-End

RUSSIA
  • JP Morgan write that the improvement in the over-year-ago inflation rate was mainly thanks to favourable base effects in utilities and other regulated prices, but note that sequential momentum also dropped notably last month.
  • They continue to expect inflation to slow to slightly below 5%oya by end-2024, while the economy is expected to cool in 1H24 as the effects of much tighter monetary policy and less accommodative fiscal policy kick in, which should ease the underlying inflationary pressures into 2H24.
  • They add that risks to their inflation forecast are probably skewed to upside, as the projected economic slowdown may not be enough to lower very high utilization rates in the (war) economy.
  • JPM continue to expect the first CBR rate cut in 2Q, with a total of 600bp cuts to 10% by year-end.

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